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U.S. equities declined on Thursday as Oracle Corp. experienced its largest drop in almost a year, reviving fears that substantial investments in artificial intelligence are putting pressure on financial statements more quickly than they can yield profits.
In contrast, the crypto market showed relative stability, somewhat detaching from weaknesses in equities as traders opted for more selective risk management.
Bitcoin reclaimed levels above $92,000 according to CoinDesk, marking modest gains after maintaining crucial support earlier this week. The leading cryptocurrency rose approximately 2.6% during the day, stabilizing following a tumultuous period that briefly saw prices dip into the low $90,000s.
Traders seemed more inclined towards maintaining trend structures instead of pursuing upside opportunities, with investments focusing on large-cap assets.
“Major institutions are divided regarding the future trajectory,” analysts from Bitunix noted in a correspondence with CoinDesk. “Some believe improving inflation could support further reductions starting in March, while others anticipate a pause in January, a wait-and-see approach through the initial half of the year, or potential delays in easing until after June.”
“Several firms on Wall Street pointed out that this ‘hawkish cut’ underscores the FOMC’s increasing challenge in maintaining unity under Powell’s leadership,” the message continued.
Ether mirrored Bitcoin’s rise, reaching close to $3,260, while SOL outshone major tokens with over a 6% surge, indicating renewed enthusiasm for higher-beta layer-1 tokens as risk appetite selectively returned.
XRP and BNB posted more modest increases, remaining within a range as investors awaited clearer insights on spot ETF developments and overall market trends. Dogecoin saw slight gains but remained lower on a weekly basis, continuing to reflect broader market sentiment rather than specific developments related to the token.
Oracle shares tumbled over 11%, marking the largest single-day decline since January, after the firm revealed a significant uptick in capital expenditures associated with AI data centers and infrastructure.
Quarterly expenditures rose to about $12 billion, substantially exceeding expectations, while the company raised its annual capex forecast to roughly $50 billion — a $15 billion increase from its earlier September prediction.
This development triggered fresh doubts about the timeframe in which AI investments will significantly convert into cloud revenues, pushing Oracle’s stock to its lowest level since early 2024 and elevating its credit risk measure to a 16-year peak.
The selloff adversely impacted tech sentiment, particularly for AI-related stocks that have been pivotal in this year’s equity rally. The Nasdaq 100 declined, as investors cautiously rotated into different sectors, highlighting a growing sensitivity to spending discipline rather than merely top-line growth.
As markets process a more fragmented outlook from the Federal Reserve and increasing scrutiny over AI economics, investors seem poised to remain tactical.
Short-term direction will likely depend less on policy signals and more on whether earnings and liquidity can justify the next phase of risk-taking across various assets.
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